Suzlon net soars 68%

High volume sales globally helped Suzlon Energy (SEL), the world's fifth largest and India's largest wind turbine manufacturer, post a better-than-expected 68 per cent jump in net profit to Rs 398 crore for the quarter ended September 30, 2007 as compared with that in the corresponding period last year, the company said on Tuesday.

Sales during the quarter were up by 74 per cent to Rs 3,641 crore. The company also announced a stock split. Each share of Rs 10 would be split into five shares of Rs 2 each.

The company said it planned to list Hansen Transmissions International BV, its Belgium based subsidiary, on the London Stock Exchange and offer shares to institutional investors.

Revenues from overseas sales (Rs 2,232 crore) accounted for about 61 per cent of the overall revenues during the period.

"Appreciation of the rupee, which was in the range of 2-3 per cent this quarter as compared with 6-7 per cent in the previous quarter, did not impact us much," Tulsi R Tanti, chairman and managing director told a news conference.

EPS increased by 68 per cent to Rs 13.70. Wind turbine generator sales contributed Rs 3,083 crore for the quarter, almost double the sales of Rs 1,608 crore in the previous corresponding quarter.

"Increase in volume business in our main markets of US, Europe, Australia, China and South America contributed to the highest ever sales and profits at the consolidated level for any quarter," Tanti said.

He said the company had a consolidated order book of Rs 16,328 crore (2,882 MW) as on October 20, 2007, of which Rs 14,339 crore was from the overseas markets.

"In India we are the market leader and we maintain above 50 per cent of the domestic market share, which we do not want to go beyond at any point of time," he said.

The consolidated figures for the half year ended September 30, 2006 and the year ended March 31, 2007 include the financial figures of Hansen Transmissions International BV, the Belgium based company it acquired in May 2006.

Hence the results for the current half year are not comparable with the previous periods.

The results also include revenues for nearly a month (6-30 June 2007) of REpower Systems AG of Germany, in which Suzlon has a 33.85 per cent stake.

The company said that the stock split was aimed at increasing the number of investors in the company's stock by lowering the minimum investment amount. "This will give small investors an opportunity to invest in Suzlon shares," Tanti said.

On the proposed listing of Hansen Transmissions International BV, which it acquired in May 2006, the company said that funds mobilised would be used to fund ongoing expansion plans.

This includes a Rs 970-crore plant to produce gearboxes for wind turbines in Coimbatore and Rs 800 crore to expand production facilities in Belgium. "Hansen is managed as an independent business," Tanti said.

He said Suzlon and REpower together had a market share of about 11 per cent of the global wind energy business in 2006. This could grow to 15 per cent this year.

Suzlon shares closed up 9.84 per cent at Rs 1,741.05 on the Bombay Stock exchange on Tuesday.